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Looking Into 2019

Friday, 21 December 2018 09:06

In 2019, all eyes will be on the EPA and its planned rulemaking in February to extend a Reid Vapor Pressure (RVP) waiver to E15 and thus enable E15 to be sold during the summer months. It’s no secret that the RVP ban on E15 in the summer has been a major impediment on the growth of E15 in Minnesota and the rest of the country. While the EPA’s shorter-than-usual timeframe for the rulemaking process raises some concerns, we remain cautiously optimistic that RVP parity for E15 will be achieved in 2019. As such, we have already begun planning advertising and promotional activities in the summer of 2019 to boost E15 usage in Minnesota during the traditionally high driving season.

On the legislative front, there will be several new opportunities for Minnesota’s ethanol industry in 2019. During the run-up to the recently concluded mid-term elections, we communicated with both state and federal candidates on issues concerning Minnesota’s ethanol industry. We are pleased to note that many of the incoming federal and state lawmakers, as well as Governor-elect Tim Walz, have voiced strong support for increasing the amount of ethanol in Minnesota’s transportation fuel and the need for funding for more E15 and E85 stations in the state.

It should also be noted that several new members of Minnesota’s delegation in congress that represent districts in the Twin Cities metro have gone on record , in some depth, to express their support for the RFS, finding a permanent fix for the RVP problem and biofuel infrastructure funding.

This new dynamic means the Congressional Biofuel Caucus can grow with strong support from Minnesota’s second, third and fifth congressional districts.

In the 2019 Minnesota legislative session specifically, we will work on expanding the availability of E15. Even with 315 E15 fuel retailers in Minnesota, just under 10 percent of the total fuel supply chain network in the state is equipped to offer E15 and higher ethanol blends. Our aim is to push closer to 20 percent market penetration so that at least 660 fuel retailers can offer E15 to motorists. But some fuel retailers will need some financial assistance to modify their fuel storage and dispensing systems and we intend to address this issue in the 2019 legislative session.

We will also work to make further refinements to the air permitting process to decrease the number of days it takes for the issuance of permits to ethanol producers from approximately 730 to 150 or fewer days. At the time of this writing, we are preparing for a face-to-face meeting with the commissioner of the MPCA and the outcome of this meeting will determine whether additional action needs to be taken during the 2019 legislative session.

We will also work to support efforts aimed at creating a tax stimulus for a modern distributed generation system that makes lower carbon intensive electricity available to ethanol producers. Such systems could include combined heat and power and expander generators. These systems decrease the transmission line loss and have the potential to move from coal-fired generating systems to those operated by less carbon-intensive natural gas.

In closing, for 2019, we will continue to focus on lowering tangible barriers to ethanol producers and increase ethanol consumption in Minnesota. We will also continue our efforts to learn more about two new vehicle concepts - Toyota’s hybrid flex fuel and Nissan’s solid oxide fuel cell - that have the potential to present new opportunities for the ethanol industry in the future.